Fast: No decisions made on Old Age Security changes

The federal government has not decided to raise the Old Age Security eligibility age from 65 to 67, according to Abbotsford MP Ed Fast.

The federal government has not decided to raise the Old Age Security eligibility age from 65 to 67, according to Abbotsford MP Ed Fast.

“Absolutely not – that is simply speculation … There have been no formal changes proposed.”

The rumour began after the Conservative government’s comments earlier this week indicating the system needs to be changed in order to keep it sustainable for future generations. Almost immediately, reports that Canada could follow the U.S. example and increase the age of eligibility began to surface, both in the media and online.

In 1983, the U.S. announced it would raise the age for collecting social security benefits to 67 from 65, by the year 2022.

“What we have said is that we are reviewing our Old Age Security program because it is not sustainable based on how it’s structured right now … if there are any changes, those changes will not affect any current retirees; it will also not affect those approaching retirement,” said Fast.

All Canadian seniors receive Old Age Security (OAS) benefits, regardless of their work history, unlike Canada Pension Plan (CPP) benefits, which are funded by workers and employers.

Fast said if any changes are put forth, they would be “fair” and come with “plenty of notice.”

The CPP, on the other hand, is “perfectly sustainable” and fully funded. Fast said there are no plans to make any changes there.

Despite his reassurances, Fast said his Abbotsford office has received several calls and emails from constituents wanting to know what is going on. But he doesn’t have the answers.

“No one is going to know exactly what, if any, changes we make until the budget.”

He said budget deliberations are always held “close to the chest” and he’s as curious as any other Canadian regarding what it will contain.

The federal budget is not expected to be announced until the end of February or early March.

According to Abbotsford Chamber executive director Allan Asaph, who has more than 25 years of experience as a financial adviser, if the government does alter the OAS system, it is unlikely to have a major effect on the public’s financial plans.

“Most people, when they’re planning for retirement, are usually looking for other ways to develop their retirement income. They’re not necessarily looking at Old Age Security as being a primary component of that. For people in their 40s … they still have time to adjust their plans accordingly.”

But Asaph said it depends on how the government implements any changes.

“Where I think the proposed changes will have the biggest impact is those individuals who are in their 60s right now and perhaps don’t have sufficient resources,” said Asaph.

Those people may be counting on OAS as one of their major sources of income and would have to wait an extra two years to receive it.

According to the Government of Canada website, the maximum OAS monthly payment is $540.12 and as of October 2011, the average payment received by eligible Canadians was $508.35.

Asaph said if you are retired and receive about $60,000 a year in taxable income, your OAS payments will begin to get clawed back.

“But, if you have somebody with $60,000 in taxable income, well, that’s a fairly decent income in retirement … then you can afford the clawback.”